D.C. Memo: Carr to Disney CEO Iger: FCC Will Act if ABC Network Rips Off ABC Affiliates
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Disney: The 200-plus ABC affiliates have been saying all year that the ABC Network owned by Disney wasn’t playing fair by squeezing them for cash that was then used to invest in Disney's streaming platforms in direct competition with the stations. Now the ABC affiliates have a powerful advocate on their side: Incoming FCC Chairman Brendan Carr. In a Dec. 21 letter, Carr warned Disney CEO Robert Iger that the FCC would be “compelled to act” if the ABC Network imposed burdensome economic terms on their affiliates that jeopardized their ability to serve their local communities. “I want you to know that I will be monitoring the outcome of your ongoing discussions with local broadcast TV stations to ensure that these negotiations enable local broadcast TV stations to meet their federal obligations and serve the needs of their local communities. A fair agreement would do just that,” Carr said. Citing reports, Carr said he heard Disney was demanding more than 100% of stations’ retransmission consent fees paid by cable and satellite TV providers, leaving stations dependent on volatile ad revenue coming under increasing attack from Big Tech. “The approach that ABC is apparently taking in these negotiations concerns me. My understanding is that ABC is attempting to extract onerous financial and operational concessions from local broadcast TV stations under the threat of terminating long held affiliations, which could result in blackouts and other harms to local consumers of broadcast news and content,” Carr said. “This is not how Congress envisioned the retransmission consent process working.” The country has about 230 ABC station affiliates, but Carr indicated that not all of them were up for renewal by the end of the year. Nexstar Media Group, in partnership with Mission Broadcasting, has about 30 ABC stations, the most among TV station groups. Carr in the Iger letter did not mention two issues: DirecTV’s pending retransmission consent complaint against Disney/ABC or the network affiliates’ demand that the FCC classify YouTube TV and Hulu + Live TV as traditional pay-TV providers. Carr’s concern about the health of local TV stations was not new. In April, he said local stations were facing “a break glass moment” stemming from “unprecedented headwinds and competition,” including from their largely unregulated Big Tech competitors.” The full text of Carr’s four-page letter to Iger was posted to the X feed of CNN reporter Brian Stelter.